FOR IMMEDIATE RELEASE - São Paulo, November 16^th , 2010 – Gafisa S.A. (Bovespa: GFSA3;NYSE: GFA), Brazil’s leading diversified national homebuilder, today reported financial results for thethird quarter ended September 30, 2010.

Commenting on results, Wilson Amaral, CEO of Gafisa, said, “We are pleased to report another solidquarter for the Company, underscored by the strength of our product lines and portfolio of threerespected brands, Gafisa, AlphaVille and Tenda, as well as the effectiveness of our national salesforce. This combination along with a positive economic climate and high demand gave us the latitudeto make favorable price adjustments, holding steady on our operating and strong backlog margins inthe face of inflationary pressure on some operating costs. As expected, we also continued to see thedilution of SG&A expenses, which for consecutive quarters has declined as a percentage ofconsolidated revenues, as the integration of Tenda and ramp up of its sales benefit the Company’sresults. Our EBITDA margin for the quarter improved to 20.6%, an 80 basis point increase over Q2and over the previous year’s third quarter. During the 3Q10, Gafisa exceeded the top end of its full-year guidance estimate for EBITDA margin, while year-to-date EBITDA margin reached 19.7%.”

Amaral added,“Gafisa remains well positioned to profit from the significant opportunities offered by thesustained growth of the Brazilian economy and homebuilding sector. Cash on hand of R$ 1.2 billion,accelerated cash flow expected in 2011 and the recent successful placement of an R$300 milliondebenture which will reduce our overall financing costs, put us in a strong position to achieve ourgrowth trajectory.

While our cash burn rate is expected to remain at a similar level in the 4Q10, we expect this ratio to bepositive in 2011, as some 7,000 legacy Tenda units requiring the use of working capital are transferreduntil 2Q11. With the expected positive cash flow for full year 2011, we will be able to reduce ourfinancial leverage, which, along with an increase in the use of Blue-print Mortgages (AssociativeCredit) – which require no working capital – for Tenda’s MCMV units, will contribute to meeting ourlaunch volume targets and at the same time keeping leverage at a comfortable level.”

Pre-sales reached R$ 1.02 million for the quarter, a 27% increase as compared to 3Q09 or 26% increase when comparing 9M10 with 9M09.

Net operating revenues, recognized by the Percentage of Completion (“PoC”) method, rose 9.1% to R$ 957.2 million from R$ 877.1 million in the 3Q09, reflecting a strong and continuing pace of execution.

Adjusted EBITDA reached R$ 197.3 million with a 20.6% margin, a 13.4% increase when compared to Adjusted EBITDA of R$ 174 million reached in the 3Q09, mainly due to continued and strong performance in all segments and better SG&A ratio. Accumulated 9M10 EBITDA grew 52% when compared to the same period of 2009.

Net Income before minorities, stock option and non recurring expenses was R$ 132.9 million for the quarter (13.9% adjusted net margin), an increase of 50% compared with the R$ 88.6 million in the 3Q09.

The Backlog of Revenues to be recognized under the PoC method rose 18% to R$ 3.4 billion from R$ 2.9 billion reached in the 3Q09. The margin to be recognized improved 322 bps to 38.2%.

Wilson Amaral, CEO -- Gafisa S.A.

Improved EBITDA Margin - Gafisa’s improved EBITDA margin of 20.6% in the third quarter continue to reflect the gradual delivery of older, lower margin units that negatively impact the company’s results,while the integration of Tenda and other structural efficiencies contributed to improved SG&A ratios.The Company’s strong backlog margin, which reached 38.2%, is an indicator of future results,reflecting the successful selling of newer higher margin projects, while the Company has also beeneffective in selling units of legacy projects with slimmer margins. Through the middle of 2011, Tendashould deliver 11,000 units, a majority of them derived from the aforementioned legacy launches.

AlphaVille Expansion - In the 3Q10 AlphaVille launched two successful projects in the northern part of the country. The first launch, insert name, was in Teresina, the capital and largest city of theBrazilian state of Piauí. According to IBGE, the city of Teresina is home to over 750,000 inhabitants,distributed over an area of 1,680 km² (650 mi² ). The project, AlphaVille’s first in the state of Piauí,consists of 746 units and features a leisure club of 24,000 m² and green areas of more than 340,000m². The project’s PSV is R$ 111 MM. By the end of October sales exceeded 95%. Alphaville’s secondproject launch was in the city of Belém, the capital of the state of Pará. Its metropolitan area has over 2million inhabitants. Sales of the project’s units began only in October, and the project was more than50% sold by the end of the month.

Gafisa Brand Celebrates Completion of 1000^th Project - On October 19, Gafisa celebrated the delivery of the Company’s 1000^th project, Terraças Alto do Lapa, a twenty-four story, 192-unitapartment building located in São Paulo. The reaching of this milestone is a testament to the deep realestate experience and execution capacity within the Gafisa organization.

Presidential Election - The recent reelection on October 31^st of the Brazilian President from the incumbent Workers' Party that created and implemented “Minha Casa, Minha Vida” and otherprograms in support of home ownership provides a high level of confidence in the continuity of suchpolicies. In late August, the government had previously announced that it would boost capital of CaixaEconomica Federal, the state-run lender responsible for administering “Minha Casa, Minha Vida”, by2.5 billion reais, the latest in a series of events that signal the intention to fund programs in support ofthe housing sector.

R$ 300 million Debenture Issuance - On November 5^th , Gafisa announced that it completed the pricing of a R$ denominated issue of 5 year and 6 year notes, consisting of R$ 300,000,000 aggregateprincipal amount split in R$ 287,000,000 for a 5 year issue and R$ 13,000,000 for a 6 year issue. Thenotes bear interest at very competitive rates of CDI + 1.95% p.a. for the 5 year and IPC-A + 7.96% p.a.for the 6 year, reflecting the Company’s strong market position and growth prospects, and replace debtat a savings of 1.5% per annum. The notes will mature on October 15, 2015 and October 15, 2016,respectively.

New Chairman and Board members – On November 8^th , Gafisa announced the appointment of Caio Racy Mattar to succeed Gary Garrabrant as non-executive chairman of the board. Gary Garrabrantand Thomas McDonald, both from Equity International (EI), elected to step down from the board ofdirectors following the reduction in EI’s holdings in Gafisa. Caio R. Mattar has served on theCompany’s board of directors since February 2006 bringing significant board, public company andconstruction market experience. This change followed the election on October 14^th of Wilson Amaralde Oliveira and Renato de Albuquerque to Gafisa’s Board of Directors, allowing it to benefit fromadditional real estate expertise, proven leadership skills and diversity of experience. Wilson Amaral deOliveira has been the chief executive officer of Gafisa S.A. since December 2005. Under his guidancethe Company has grown to be one of the largest construction companies in Brazil. Mr. Albuquerque, aco-founder of AlphaVille Urbanismo, Brazil’s leading builder of community developments, has been apioneer in the Brazilian real estate sector for fifty years. All other board members remained in theiroriginal positions.

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In the 3Q10, launches totaled R$ 1.24 billion, an increase of 140% compared to the 3Q09, represented by 34 projects/phases, located in 16 cities.

 41% of Gafisa launches represented a price per unit below R$ 500 thousand, while nearly 49% of Tenda’s launches had prices per unit below R$ 130 thousand. FIT, a unit of Tenda, launched 11 projects with an average price per unit of R$ 155 thousand. These projects represented a PSV of R$ 272 million or 57% of Tenda’s launches in the quarter. Excluding these projects the average price per unit of Tenda was R$ 99 thousand, among the lowest average prices for homebuilders listed on the Bovespa.

The Gafisa segment was responsible for 43% of launches, AlphaVille accounted for 18% and Tenda for the remaining 39%.

The tables below detail new projects launched during the 3Q and 9M 2010 and 2009:

Pre-sales in the quarter increased by 27.3% to R$ 1.02 billion when compared to the 3Q09.

The Gafisa segment was responsible for 51% of total pre-sales, while AlphaVille and Tenda accounted for approximately 16% and 33% respectively. Among Gafisa’s pre-sales, 59% corresponded to units priced below R$ 500 thousand, while 65% of Tenda’s pre-sales came from units priced below R$ 130 thousand.

The tables below illustrate a detailed breakdown of our pre-sales for the 3Q and 9M 2010 and 2009:

The consolidated company attained a sales velocity of 25.7% in the 3Q10, compared to a velocity of  22.1% in the 3Q09. Sales velocity also increased when compared to the previous period, mainly due to the improved performance of Gafisa and AlphaVille during the quarter, even with an AlphaVille launch on the last day of September that only started to recognize sales in October. The sales velocity in the third quarter and in the first nine months launches was respectively 46.8% and 56.0%, which is consistent with our strategy to optimize the equilibrium between sales velocity and margins/return, compensating for cost pressure driven mainly from labor. In the 3Q10 Tenda canceled an old project that did not perform in sales and slated it for re-design and re-launch. At the same time Gafisa increased the price of some units in inventory that almost compensated for the Tenda cancellation.

Gafisa’s geographic reach and execution capacity is substantial. The Company was present in 22 different states, with 212 projects under development at the end of the third quarter. This diversified platform also helps to mitigate execution risk, since each region of the country has a different dynamic of growth, supply and costs. Some 411 engineers and architects were in the field, in addition to approximately 508 intern engineers in training.

Further evidence of the Company’s execution capacity is the strong pace of revenue recognition, demonstrating that the execution pace of construction is trending with the level of sales growth. Gafisa and its subsidiaries continue to selectively launch successful projects in new regions and in multiple market segments, maximizing returns in accordance with market demand. Through the end of September, Tenda contracted 16,812 units with CEF and had submitted for analysis approximately 8,000 additional units to be contracted during 2010, representing an estimated 24,000 units for the full year, being approximately 80% of the total MCMV units.

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During the third quarter, Gafisa delivered 16 projects with 2,498 units equivalent to an approximatePSV of R$ 300 million, Gafisa segment delivered 6 projects and Tenda delivered the remaining 10projects/phases. We are now considering the delivery date based on the “delivery meeting” that wehave with each project customer, instead of on the physical completion. As a result, we are adjustingour estimate for delivered units in 2010 from 20,000 to 15,000, which better reflects the official deliverydate that is now in use by the company.

For the 9M10, Gafisa completed 35 projects with 9,995 units which represent more than R$1.26 billionin PSV.

September 19^th was an important date for the Gafisa group. On this date, the Gafisa brand celebratedthe delivery of the Company’s 1000^th project, Terraças Alto do Lapa, a twenty-four story, 192-unitapartment building located in São Paulo. This milestone is a testament to the deep real estateexperience and execution capacity within the Gafisa organization.

The tables below list the products delivered in the 3Q10:

The Company’s land bank of approximately R$ 16.6 billion is composed of 212 different projects in 22 states, equivalent to more than 92 thousand units. In line with our strategy, 38.5% of our land bank  was acquired through swaps – which require no cash obligations.

During the 3Q10 we recorded a net increase of R$ 2.02 billion in the land bank, reflecting acquisitions that more than compensate for the R$1.24 billion launches in the quarter.

On the strength of solid sales in the 3Q10, both of newly launched projects and units from inventory, in addition to an accelerated pace of construction, the Company recognized substantial net operating revenues for 3Q10, closing with R$ 957.2 million compared to R$ 877.1 million in the 3Q09, with Tenda contributing 37% of the consolidated revenues.

Revenues for the industry are recognized based on actual cost versus total budgeted costs of land and construction (Percentage of Completion method or PoC method).

The table below presents detailed information about pre-sales and recognized revenues by launch year:

On a consolidated basis, gross profit for the 3Q10 totaled R$ 275.9 million, an increase of 8% over 3Q09, reflecting continued growth and business expansion. The gross margin for 3Q10 reached 28.8% (32.3% w/o capitalized interest) 77 bps higher than the 3Q09.

In the third quarter 2010, SG&A expenses totaled R$ 113.2 million, in line with the same period of 2009. When compared to the 2Q10, SG&A decreased from R$ 116.3 million to R$ 113.2 million, reflecting improved selling expenses that were 12% below the previous quarter mainly due to a more efficient sales structure in Tenda. The improved optimization of the sales platform reflect the benefits of the merge into Gafisa and the adjustments made in the 1H10.

When compared to the 3Q09, the SG&A/Net Revenue ratio improved 108 bps, also reflecting the continued gains in operating efficiency at Tenda and from synergy gains related to the merger of Tenda into Gafisa. As Tenda’s sales and revenues continue to ramp up in the coming quarters, it is expected that costs associated with its sales platform should continue to be diluted and reflect in improved ratios.

We have already achieved a comfortable level of SG&A/Net Revenue even prior to capturing all of the expected synergies that should come primarily from further G&A dilution. We continue to expect to capture more benefits in 2011.

When compared to 2Q10 and 3Q09, expenses improved as a share of top lines, resulting in a comfortable ratio of SG&A/Net Revenues of 11.8% in the 3Q10.

In the 3Q10, our results reflected a negative impact of R$2.2 million, compared to R$ 40.0 million in the 3Q09 mainly due to lower contingency provisions did in the 3Q10.

Our Adjusted EBITDA for the 3Q10 totaled R$ 197.3 million, 10% higher than the R$ 174 million for 3Q09, with a consolidated adjusted margin of 20.6%, compared to 19.8% in the 3Q09 and 2Q10.

This gain is part of an expected gradual recovery based on the Company’s results recognition increasingly reflecting the execution of recent projects at the same time that our older-low margin projects are being delivered.

We adjust our EBITDA for expenses associated with stock option plans, as it represents a non-cash expense.

Depreciation and amortization in the 3Q10 was R$ 8.3 million, a slightly decrease of R$ 1.5 million when compared to the R$ 9.8 million recorded in 3Q09. This R$ 8.3 million was also in line with the R$ 8.8 million recorded in the 2Q10.

Net financial expenses totaled R$ 11.9 million in 3Q10, compared to net financial expenses of R$ 31.0 million in the 3Q09, mainly due to the higher amount of capitalized interest, reflecting increased projects under construction.

Income taxes, social contribution and deferred taxes for the 3Q10 amounted to R$ 10.5 million, compared to R$ 27.9 million in the 3Q09. The effective tax rate was 7.5% in the 3Q10, compared to 24.6% in the 3Q09, mainly due to the deferred tax in relation to the amortization of Tenda’s negative goodwill, which negatively affected the 3Q09 figures. When compared to the R$ 22.1 million in the 2Q10, we also saw an important reduction, mainly due to a lower deferred taxes provision, since we are now basing the income tax provision on taxable income.

Net income in 3Q10 was R$ 116.6 million compared to R$ 63.7 million in the 3Q09. However, if we the adjusted net income (before deduction of expenses related to minority shareholders and stock options), this figure reached R$ 132.9 million, with an adjusted net margin of 13.9%, representing growth of R$ 44.3 million when compared to the R$ 88.6 million in the 3Q09.

Earnings per share already adjusted for the 2:1 stock split in all comparable periods were R$ 0.27/share in the 3Q10 compared to R$ 0.24/share in 3Q09, a 10.7% increase. Shares outstanding at the end of the period were 430.9 million (ex. Treasury shares) and 261.0 million in the 3Q09.

The backlog of results to be recognized under the PoC method reached R$ 1.33 billion in the 3Q10, R$ 317 million higher than 3Q09. The consolidated margin in the 3Q10 was 38.2%, 181 bps higher than the 2Q10, reflecting the fact that recent projects are having a greater impact on the company’s results to be recognized while the impact of our older-lower margin projects diminish as we are delivering them.

Another positive impact came from the National Construction Cost Index (INCC) that increased over 3% in the period, reflecting inflation from May to July, since contracted unit prices are adjusted based on INCC of the second prior month. In this period the INCC also reflected the labor annual wage adjustment that happened across the country.

The table below shows our revenues, costs and results to be recognized, as well as the expected margin:

Cash and Cash Equivalents
On September 30, 2010, cash and cash equivalents exceeded R$ 1.2 billion, 32% lower than the balance of R$ 1.8 billion as of June 30, 2010, and 12% higher than the R$ 1.1 billion recorded at the end of 3Q09, mainly reflecting R$ 453 million cash burn (explained in the “Liquidity” session) and the R$ 122 million net amortization of debts in the 3Q10. It’s important to highlight that in October the company completed the issuance of a R$300 million debenture, not reflected in the 3Q10 figures.

Accounts Receivable
At the end of the 3Q10, total accounts receivable increased by 10% to R$ 8.7 billion, compared to R$ 7.9 billion in 2Q10, and an increase of 37% as compared to the R$ 6.4 billion balance in the 3Q09, reflecting increased sales activity.

Inventory at market value totaled R$ 2.9 billion in 3Q10, an increase of 4% when compared to the R$ 2.8 billion registered in the 3Q09. On a consolidated basis our inventory is at a low to comfortable level of 9 months of sales based on LTM sales figures.

Finished units of inventory at market value represented 9% by the end of the quarter, reflecting an important reduction from the 11.6% registered by the end of the 2Q10, while 55% of the total inventory reflects units where construction is up to 30% complete.

On September 30, 2010, Gafisa had a cash position of R$ 1.2 billion. On the same date, Gafisa’s debtand obligations to million cash burn in the quarter. When excluding Project Finance, thisratio reached only 6.2% net debt/equity, a comfortable leverage level with a competitive cost, of lessthan the Selic rate.

Our 3Q10 cash burn was mainly explained by the over R$ 700 million expenditures in construction andalso development payments. While our cash burn rate is expected to remain at similar quarterly levelsinto the 4Q10, we expect this ratio to be positive in 2011, partially supported by some 7,000 legacyTenda units (non standardized units launched before Gafisa’s acquisition) requiring the use of workingcapital that will be transferred up to 2Q11. With the expected positive cash flow for full year 2011, wewill be able to deleverage the company, which together with a greater use of the Associative Credit -requiring no working capital - for Tenda’s MCMV units, should contribute to our ability to meet ourhigher launch volume targets and, at the same time, keeping leverage at a comfortable level.

In the 3Q10 the company increased project finance debt in R$ 138 million, reflecting the ability tofinance ongoing projects. Currently we have access to a total of R$ 3.8 billion in construction financelines of credit provided by all of the major banks in Brazil. At this time we have R$ 2.1 billion in signedcontracts and R$ 218 million in contracts in process, giving us additional availability of R$ 1.5 billion.

We also have receivables (from units already delivered) of R$ 300 million available for securitization.The following tables set forth information on our debt position as of June 30, 2010.

Gafisa is narrowing the range of the 2010 launches guidance to R$ 4.2 billion - R$ 4.6 billion, with an expected full year 2010 EBITDA margin to reach between 18.5% - 20.5%.

Through the first nine months of 2010, Gafisa reached 67% of the mid range of the launch guidance, in line with historical seasonality. Gafisa delivered a 20.6% EBITDA margin in the 3Q10 and 19.7% EBITDA margin in the 9M10, well within the previously stated guidance range.

This release contains forward-looking statements relating to the prospects of the business, estimates for operatingand financial results, and those related to growth prospects of Gafisa. These are merely projections and, as such,are based exclusively on the expectations of management concerning the future of the business and its continuedaccess to capital to fund the Company’s business plan. Such forward-looking statements depend, substantially, onchanges in market conditions, government regulations, competitive pressures, the performance of the Brazilianeconomy and the industry, among other factors; therefore, they are subject to change without prior notice.